Zambia says debt relief crucial

[Robert Weissman <rob@essential.org>]

Zambia says debt relief crucial in fighting AIDS

By Manoah Esipisu

LUSAKA, Sept 16 - Zambia, whose economy is tottering under the weight of
AIDS, said on Thursday that only massive debt relief could free the type of
resources it requires to fight the epidemic.

"It is estimated that 19 percent of the adult population between the ages
of 15 to 49 years is currently HIV positive," Finance Minister Katele
Kalumba told 11th International Conference on AIDS and Sexually Transmitted
Diseases (ICASA).

"Unless we can decrease and eventually eliminate the spread of HIV/AIDS,
our national resource development goals as well as other prospects for
sustainable development are unobtainable.

"Cancellation of debt or a huge reduction in debt servicing will free up
resources for investment into activities that will control the spread of
HIV/AIDS and respond to its impact," Kalumba said.

In 1998, Zambia's real gross domestic product per capita declined by five
percent, Kalumba said, adding that inflation rose to 30.6 percent at
end-1998 from 18.6 percent the previous year. He gave no forecasts for
1999.

Interest rates have soared while the local kwacha currency took a heavy
beating between 1997 and 1999.

DEBT SERVICING TAKES MORE THAN HEALTH, DEVELOPMENT

Zambia's external debt stock amounts to around $6.5 billion. Its debt
servicing obligations stood at $123 million in 1998, a level that exceeds
annual spending on health, education, water and sanitation and other
welfare projects combined, Kalumba said.

International aid workers said the rest of Africa sorely required debt
relief to fight AIDS as well as reduce poverty.

"The question of debt relief must be given fresh and serious examination.
It is tied to poverty in Africa, it is tied to whether the continent can
put together effective programmes to fight AIDS," Carol Bellamy, head of
the U.N. agency responsible for children affairs (UNICEF), told Reuters.

Callisto Madavo, the World Bank's Vice President for Africa, told Reuters
that international agencies were redefining the Heavily Indebted Poor
Countries Initiative (HIPC) debt relief project, to allow more sub-Saharan
countries to benefit.

The scheme aims to make debt relief accessible to countries that have a
long history of economic reforms and to target poverty. It is not known
when the improved HIPC will take effect.

UGANDA DEBT RELIEF BROUGHT DEVELOPMENT GAINS

Reformist Uganda was the first nation to gain relief under HIPC -- the
results have been improved schools, roads and concerted anti-AIDS
programmes.

Kalumba said he was proposing a radical project in which cash from debt
relief was channelled to a non-government body. The money would then be
available for serious anti-AIDS projects and a report on how the money was
used would be made public every quarter.

"The Zambian government is proposing a multilateral and bilateral debt for
development arrangement to generate resources for HIV/AIDS prevention and
control," Kalumba said, saying that donors and other players would jointly
agree all all projects to be funded.

Half of Zambia's 10 million people will eventually die of AIDS if its
spread is not immediately halted, HIV/AIDS counsellors say.